Digital Diplomacy
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Digital Diplomacy

Cruising Towards Self-Driving Cars

Microsoft recently announced that they are included in an investment of $2 billion in Cruise, a self-driving car company that was acquired by GM in 2016 for an undisclosed amount.

Cruise was founded in 2013 and the company’s president, Dan Ammann, had been president of GM until joining Cruise a few years ago. The investment was announced this week and puts Cruise’s total value at $30 billion. The deal will also allow GM and Cruise to develop vehicles and services on Microsoft’s Azure cloud computing platform.

Cruise Retrofitted Chevy Volt (Credits Car and Driver)

Many analysts and executives have stated that they expected driverless taxi and ride-hailing services to one day be a dominant force. This speculation has been making the rounds through different publications and websites for years and many expected Cruise to be ready to serve paying customers by the end of 2019.

Microsoft is not the first tech company to reportedly be venturing into this arena, however. Many other tech firms that have dipped their toes into self-driving cars, such as Apple, which has reportedly restarted plans to create its own electric self-driving car. Waymo, a leading competitor to Cruise, is also a subsidiary of Google’s parent company Alphabet.

Microsoft will join Honda, who has invested large sums and partnered with Cruise, and various other institutional investors. The companies did not release how large of a portion of that investment each company is putting in or how large of a stake in Cruise its partners will receive as a result of the investment. A spokesperson for Cruise did confirm, however, that General Motors will retain their majority stake.

Honda had initially announced when it originally partnered with GM and Cruise in 2018 that it would invest $2 billion over the next 12 years. Honda’s participation in this latest round of investment is in addition to that original agreement, according to a Cruise spokesman. Honda has been working with General Motors and Cruise on developing a self-driving car called the Origin for taxi and delivery services. The Origin is designed to function entirely without a driver and has no brake or gas pedals and no steering wheel. GM had stated that the Origin will be built at GM’s Factory Zero in Michigan that is being modified for electric vehicles.

Many roadblocks still stand in the way of making this a reality though. Cruise still needs an exemption from the National Highway Traffic Safety Administration to operate a car like the Origin due to the lack of traditional car components. The company has currently been using modified Chevrolet Bolt EVs to test its self-driving technology to bypass the exemption and has begun testing its technology in cars with no human driver inside the vehicle.

Cruise has not lived up to the high expectations as of yet. Many projections that have been made are past the deadline with no substantive action seen yet. The entire self-driving sector has struggled to live up to the hype that has dominated much of the decade. Companies are realizing the immense challenge of building a self-driving car that works and regulators think is safe.

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